Experts at Bank of America think we’re in a 'run-it-hot' economy — and these stocks stand out
The outlook for the U.S. economy for the new year looks largely positive with several tailwinds set to boost income, bring down inflation, and reduce uncertainty in the markets. According to Bank of America analysts, banking stocks are set to emerge as some of the most attractive in what economists dubbed the "Run It Hot" economy. Apart from banking, the investment research firm, CFRA, has named a few tech stocks to benefit the most as well.
While the GDP grew by a bumper 4.3% in the third quarter of 2025, the trend is expected to continue into 2026, with the expected Federal Reserve rate cuts, easing regulations, increased tax refunds for consumers, and ample credit availability. Amid the positivity, the banking stocks have rallied, posting astonishing numbers. One of the world's largest banks and financial services companies, JPMorgan Chase has roughly $4 trillion in assets. The firm reported a 9% revenue growth in the third quarter of 2025, and its net income also grew by a strong 12%, as per US News, with roughly $4 trillion in assets. Over the past six months, JP Morgan shares rallied 14.8% compared with the S&P Index’s gain of 15.7%, reaching an all-time high of $334.80 last month, as per Investing.com.
At the same time, stocks of Bank of America BAC and Citigroup were up 19.5% and 44.5%, respectively, marking a milestone for the latter. Citigroup posted a 70% return in 2025, with its shares trading above book value, at about 1.1 times. This was the first time since 2008 that the firm's stock entered a year trading at such a high, as per FactSet data reported by the Wall Street Journal. Another big bank to look out for is Morgan Stanley (MS). The firm reported 18% revenue growth in the third quarter, including a notable 25% year-over-year improvement in trading revenue. As per Simply Wallet, the stock of the firm last closed at $187.75, with total returns of 4.8% over 7 days, and 52.1% over 1 year.
Apart from banking, the most obvious stock to bet on in the tech industry is Nvidia Corp (NVDA). The high-end semiconductor maker Nvidia has posted the most spectacular growth stories in the past 15 years, as its revenue grew by 62% year over year in the fiscal third quarter, while net income went up by 65%, as per the CFRA. The firm's analyst, Angelo Zino, told US News that it has put a "strong buy" rating on the stock with a price target of $270, with the company projecting a 63.1% revenue growth in the coming year.
Apart from Nvidia, the CFRA has put a "buy" rating on Broadcom (AVGO) as well, owing to its 74% growth in AI infrastructure investment. Furthermore, another key player in the semiconductor space, Advanced Micro Devices Inc (AMD), also posted a 61% net income growth in the third quarter, earning a "strong buy" rating from the firm.
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